Martin Lewis, founder of MoneySavingExpert.com, says: “For years energy firms have used spiel, spin and misdirection to try to pretend that those on prepayment tariffs are getting the same rates as those on a normal billed meter. They get away with this by comparing prepayment costs to the cost of their expensive standard tariffs using the most expensive payment method.

“Yet the real problem with prepay is that there’s no real competition. All the cheap deals offered are for direct debit, and they can be £300-£400 a year cheaper than prepay prices for someone on typical use. That is a national disgrace, because most of the poorest people in our society have prepayment meters – the most potent poverty premium possible. Simply regulating that all tariffs should be available to all customers (with a small surcharge allowed for prepayment) would fix this. In the meantime the Government’s cap does put a welcome sticking plaster over the problem and will bring bills down.

“More subtly though it is also an admittance that competition isn’t working. Politicians have to make a decision. If you want a competitive switching market, you must accept big price differentials – with some paying a lot more than others; if not there’s no incentive to switch. Alternatively, accept competition isn’t the solution and regulate prices – which would mean those who don’t switch would see prices drop, and those who do would see them rise. These two stark solutions have benefits. The problem is politicians of all parties have tried to do something in the middle and that’s what fails.”

-ends-

Spokespeople are available for broadcast interviews and further commentary on request.

About MoneySavingExpert.com: MoneySavingExpert.com is dedicated to cutting consumers’ bills and fighting their corner. The free-to-use consumer finance help resource aims to show people how to save money on anything and everything, and campaigns for financial justice. Set up in 2003 for just £100, its free-to-use, ethical stance quickly made it the UK’s biggest independent money website, according to internet ranking site Alexa.com, and the number one ‘Business and Finance – Business Information’ site, according to Hitwise. It has more than 12 million people opted-in to receive the weekly Martin’s Money Tips email, and more than 14 million unique monthly site users who visit more than 24 million times a month. In September 2012, it joined the MoneySupermarket.com Group PLC.

About Martin Lewis: Martin Lewis OBE, Money Saving Expert, is the journalist and consumer campaigner who created MoneySavingExpert.com, the UK’s biggest money website. He’s the UK’s most internet-searched man, Citizens Advice’s Consumer Champion of the Year, and has spearheaded major financial justice campaigns including bank charges reclaiming (over six million template letters downloaded) and PPI reclaiming (over five million) and a successful large-scale campaign to get financial education in schools. He has his own prime-time ITV programme, The Martin Lewis Money Show, as well as regular slots as resident expert on Good Morning Britain, This Morning and Radio 5 Live, among others. He was appointed OBE in the Queen’s Birthday Honours in June 2014.

How this site works

We think it's important you understand the strengths and limitations of the site. We're a journalistic website and aim to provide the best MoneySaving guides, tips, tools and techniques, but can't guarantee to be perfect, so do note you use the information at your own risk and we can't accept liability if things go wrong.

This info does not constitute financial advice, always do your own research on top to ensure it's right for your specific circumstances and remember we focus on rates not service.

Do note, while we always aim to give you accurate product info at the point of publication, unfortunately price and terms of products and deals can always be changed by the provider afterwards, so double check first.

We don't as a general policy investigate the solvency of companies mentioned (how likely they are to go bust), but there is a risk any company can struggle and it's rarely made public until it's too late (see the Section 75 guide for protection tips).

We often link to other websites, but we can't be responsible for their content.

Always remember anyone can post on the MSE forums, so it can be very different from our opinion.

MoneySavingExpert.com is part of the MoneySupermarket Group, but is entirely editorially independent. Its stance of putting consumers first is protected and enshrined in the legally-binding MSE Editorial Code.